The Walt Disney Company has agreed to pay a $10 million fine in order to settle a complaint with the Federal Trade Commission over some of its ‘Made for Kids’ content on YouTube.
The Tuesday update comes after the FTC accused Disney of violating the 1998 Children’s Online Privacy Protection Act (COPPA) when it failed to correctly label videos as being made for children under 13. As such, their personal data was collected and ad-targeted without parental consent.
In addition to paying the civil penalty, Disney must adhere to COPPA rules on YouTube going forward and will instate a program to accurately determine when future videos need to be labeled as Made for Kids, or MFK.
“This case underscores the FTC’s commitment to enforcing COPPA, which was enacted by Congress to ensure that parents, not companies like Disney, make decisions about the collection and use of their children’s personal information online,” FTC chairman Andrew N. Ferguson said in a statement. “Our order penalizes Disney’s abuse of parents’ trust, and, through a mandated video-review program, makes room for the future of protecting kids online — age assurance technology.”
The proposed settlement with Disney comes six years after the FTC began requiring YouTube to label children’s content as MFK, also due to COPPA violations. The FTC claimed Disney failed to re-label 300 videos in question during 2020 after they were uploaded as NMFK by default, even though YouTube allegedly told the entertainment company of the change.
With that said, once YouTube can successfully use AI to sort the various age-specific videos, the House of Mouse will be off the hook for its own ‘Audience Designation’ program.
“Supporting the well-being and safety of kids and families is at the heart of what we do,” a Disney spokesperson told Axios. “This settlement does not involve Disney-owned and -operated digital platforms, but rather is limited to the distribution of some of our content on YouTube’s platform … Disney has a long tradition of embracing the highest standards of compliance with children’s privacy laws, and we remain committed to investing in the tools needed to continue being a leader in this space.”
